MACROECONOMICS
Service sector stagnates
Activity in Taiwan’s service sector was sluggish in September due to fewer business days as a result of Typhoon Megi, according to a survey by the Commerce Development Research Institute. The institute said the index of service industry was 97 points in September, down 2 points from the previous month and flashing “yellow-blue,” indicating sluggishness. It forecast that the index for last month would rise to 99 points on higher consumption spurred by an increased number of holidays and promotional campaigns by department store chains.
CHINA
Cap on banks to be raised
The government said it is committed to letting overseas banks own bigger stakes in securities and fund-management joint ventures in the nation, in a statement that was released after financial and economic talks this week with the UK. A 49 percent ownership limit will gradually be raised, the Ministry of Finance said in a statement on Friday, without saying when or by how much. Foreign investors’ participation can boost the industry’s competitiveness and global influence, it said. China also pledged to help companies increase investment in the UK and support London as an offshore yuan center.
RETAIL
JC Penney cuts outlook
JC Penney Co cut its sales outlook for the year after reporting a surprise decline for a key sales figure during the third quarter as it wrestled with sluggish clothing sales. The report is a setback for JC Penney, whose business, like other retailers, has been volatile, bouncing back in the summer after a tough start to the year. JC Penney reported a loss of US$67 million in its fiscal third quarter, which had narrowed from a loss of US$115 million a year ago. On a per-share basis, the Plano, Texas-based company said it had a loss of US$0.22. Losses, adjusted for restructuring costs, were US$0.21 per share. The results beat Wall Street expectations.
SOUTH AFRICA
Eskom head resigns
The head of the nation’s state-owned power company Eskom Holdings SOC Ltd on Friday announced his resignation in a corruption scandal that has embroiled President Jacob Zuma. Brian Molefe became the first person to step down after a report released last week raised allegations of corrupt links between Zuma, ministers, top officials and the Guptas, a wealthy business family. The report included allegations that Zuma ensured the Gupta family won huge preferential contracts with state companies such as Eskom.
ENERGY
SandRidge to cut more jobs
A SandRidge Energy Inc spokesman said the Oklahoma City-based company is planning more layoffs. David Kimmel on Friday told the Journal Record that employees have been told that layoffs would occur soon, but he declined to say how many employees would be affected or when the layoffs would take place. Kimmel said low commodity prices make the layoffs necessary for the long-term success of the oil and natural gas producer. The announcement comes just more than a month after SandRidge emerged from bankruptcy and after it laid off 172 employees in February.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to